Hedge fund Greenlight Capital bought a big stake in Macy's last quarter, betting that the retail giant could be a prime target for a takeover, firm head David Einhorn told investors in a letter.
Einhorn says a private equity firm and a REIT could team up to buy the company and "unlock" the value of its vast real estate holdings, Bloomberg reports. (Macy’s shared jumped nearly 6% on the news.)
Since last year, activist investors have pushed Macy's to spin off its $21B real estate holdings —more than the company's current value—into a REIT to help boost the struggling retailer's stock performance.
While Macy's rejected the idea, the company's crisis has only deepened since: Shares have lost more than half ther value from a July peak of $72.80 and the retailer recently announced the closure of 40 stores. All of this makes the possibility of a takeover more likely than ever, Einhorn says. [Bloomberg]
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